World energy demand to soar

Strongest growth forecast for China, India

Thursday, April 15,
2004 Posted: 0156 GMT (0956 HKT)

World
oil demand may reach 121 million barrels a
day by 2025.

WASHINGTON (Reuters)
-- World demand for all forms of energy is expected
to grow by 54 percent over the next two decades, with
oil consumption alone jumping by 40 million barrels
a day, the U.S. government says.

The U.S. Energy Information Administration's long-term
forecast to 2025 projects the strongest growth in
energy use from developing countries, especially China
and India, where buoyant economies will boost demand.

Energy use in developing countries is forecast to
soar by 91 percent over the next two decades, while
rising 33 percent in industrialized nations.

"Generally, the nations of the industrialized world
can be characterized as mature energy consumers with
comparatively slow population growth," the EIA, the
Energy Department's analytical arm, said Wednesday.

These countries are also shifting from energy-intensive
manufacturing to service industries, which means slower
growth in energy use, it said.

World oil demand is forecast to rise from 81 million
barrels per day (bpd) this year to 121 million bpd
in 2025, with the United States, China and the rest
of developing Asia soaking up almost 60 percent of
those extra barrels, EIA said.

"Over the past several decades, oil has been the
world's foremost source of primary energy consumption,
and it is expected to remain in that position," the
agency said.

To meet that demand, global oil production capacity
would have to rise by 44 million bpd over current
levels, it said.

OPEC is expected to be the major supplier of the
extra oil, with the cartel's production at 56 million
bpd in 2025 compared to 27 million bpd this year.
Additional non-OPEC barrels will also come from offshore
wells in the Caspian Sea, Latin America and West Africa.

Average annual oil prices are expected to decline
after this year to $25 a barrel in inflation-adjusted
2002 dollars, and then rise slowly to $27 in 2025,
which would be $51 a barrel in nominal dollars, the
agency said.

Report highlights

Other highlights of EIA's long-term energy forecast
include:

Natural gas is the fastest growing primary energy
source through 2025, increasing 67 percent to 151
trillion cubic feet (tcf) a year. That would be
down from the 176 tcf forecast in last year's report,
because of slower projected declines in nuclear
power generation and concerns about long-term gas
production.

World electricity demand will almost double by
2025, growing 3.5 percent a year in developing countries
from newly purchased home appliances and air conditioning.

Coal use will grow by 1.5 percent a year, with
demand increases in all regions expect for Western
Europe and the former Soviet states in Eastern Europe,
where coal will be displaced by natural gas.

Nuclear power use will increase because of higher
generating capacity rates for existing plants and
fewer facilities will be retired. In the developing
world, consumption of electricity from nuclear power
increases by an average 4.1 percent a year during
the forecast period.

Carbon dioxide emissions will rise from 23.9 billion
metric tons in 2001 to 27.7 billion tons in 2010
and 37.1 billion tons in 2025. The developing world
will account for 61 percent of the increase because
of reliance on coal and other fossil fuels.

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